Fluence: The Data Center Opportunity Looks Promising, But Other Risks Remain

The Alpha Sieve4.86K FollowersFollow5ShareSavePlay(10min)Comment(1)SummaryFluence Energy, noted for its energy storage solutions, has underperformed its industrial and Russell 2000 peers in a big way since listing, although the past year has been less troubling.FLNC is well-positioned in the data center energy storage market with a potential pipeline of 36 GWh that could be converted, and its new modular Smartstack solution looks well-poised to see traction.FLNC's trades at a hefty forward EBITDA multiple of 45x, and its volatile medium-term EBITDA growth profile (CAGR of 17%) doesn't justify that premium.Even though FLNC has liquidity of over $1B, the elevated cash burn is a cause for concern.The stock, which had broken out of its falling wedge, has now fallen back again, while the current relative strength ratio supports a neutral positioning. Devrimb/iStock via Getty Images Introduction Fluence Energy, Inc. (FLNC), which will officially complete 5 years of existence in June 2026 (although its roots date back to June 2017, with illustrious entities such as Siemens AG andThis article was written byThe Alpha Sieve4.86K FollowersFollowInvestment research, primarily oriented towards uncelebrated/under-covered stocks and ETFs, across North America, Latin America, Europe and Asia. Seeks to combine both fundamental and technical disciplines while making an investment/trading proposition.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.